Smaller GM brings more challenges to health care providers

A revitalized General Motors Corp. may indeed emerge quickly from bankruptcy, but the automaker will be much smaller no matter how successful, and the health benefits it pays employees and retirees will be less comprehensive.
A New GM, as leaders have dubbed it, means new challenges for health care providers in Michigan and beyond, where communities have grown and then struggled in sync with the company's tottering fortunes.
Jack Weiner, president and CEO of 403-bed St. Joseph Mercy Oakland in Pontiac, said he expects to lose as much as 10 percent of patient volume in the fiscal year that begins July 1  compounding the growth in charity care already up 120 percent over the past two fiscal years as the community's economy eroded. The hospital has anticipated the challenges by eliminating 150 full-time positions, including three executive posts, and shifting mission resources from activities such as cardiovascular education to primary care clinics.
The bottom line is that hospitals are community assets, Weiner said. We will find ways to do what's needed to continue to fill that role. We have no choice.
Pontiac is home to an assembly plant (for full-size Chevrolet and GMC trucks) that GM announced would close by October, as well as a metal-stamping facility set to go idle for standby capacity in December 2010.
Also scheduled to go dark on standby is a plant, a few miles north of Pontiac in Lake Orion, that has assembled the Chevy Malibu and some Pontiac models  a nameplate GM plans to phase out.
St. Joseph Mercy Oakland is part of a seven-hospital division of Novi-based Trinity Health called St. Joseph Mercy Health System. Its president and CEO, Garry Faja, said four of his hospitals will suffer the consequences of an estimated 17,000 jobs lost at eight plants closed or idled in communities they serve, and they are planning for flat volume in fiscal 2010 while charity care and bad debt burdens grow by 25 percent, or $16 million.
Yet St. Joseph Mercy executives are optimistic that their hospitals and communities will weather the challenges  and they and their Michigan peers noted they've logged several years of experience adjusting to automakers' misfortunes; the GM bankruptcy is just the latest step, though a precipitous one.
I would much rather have a smaller but stronger GM survive in this marketplace than no GM at all, said Robert Riney, executive vice president and COO of seven-hospital Henry Ford Health System, founded in Detroit nearly a century ago by Henry Ford. But, Riney said, a smaller GM means its payer mix will continue to include fewer of the premium insured and more patients covered by Medicaid, traditional Medicare or no insurance at all.
GM will continue to provide health benefits during its court-supervised haggling with creditors, and Michigan insurance companies that cover large numbers of GM's employees, such as Henry Ford subsidiary Health Alliance Plan and Blue Cross Blue Shield of Michigan, notified their GM plan members that their claims will be processed as usual.
Peter Schonfeld, senior vice president of policy and data services for the Michigan Health and Hospital Association, said many of its member hospitals will feel the loss of insurance for tens of thousands of GM employees whose jobs are shed and also the reduced benefit levels agreed to by the United Auto Workers union. Many of the employees who keep their jobs will work reduced hours, Schonfeld added.
In order to get the Obama administration to prop up the company with the U.S. Treasury, the UAW and GM agreed to immediately reduce benefit levels for retirees and amend their 2007 agreement transferring to the union the responsibility and a $10 billion fund to cover retiree health benefits effective Jan. 1.
From Modern Healthcare